Low-Income Canadians: A CRA Cash Benefit Just Dropped July 10

A July CRA payment could put as much as $2,869 back into eligible working families’ budgets through the Canada Workers Benefit.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published July 22, 10:30 am EDT

| More on: NWC

Key Points

The Canada Workers Benefit is a refundable credit for low-to-modest income workers, paid partly in July, October, and January.
You don’t apply for the advance payments, since CRA uses your tax return to calculate and pay them automatically.
Use the money for essentials or debt first, then consider a small TFSA investment if you have cash left.

Summer bills can swallow a paycheque before the weekend even arrives, but one Canada Revenue Agency (CRA) benefit can return up to $2,869 to an eligible working family this year. The first advance payment for the new cycle landed July 10, putting cash back into household budgets while groceries and rent stubbornly refuse to take a summer holiday.

That headline amount won’t arrive in one glorious deposit. The July payment forms part of the Advanced Canada Workers Benefit, which delivers a portion of the annual Canada Workers Benefit before tax season rolls around again.

customer adds cash to tip jar at business — Source: Getty Images

How the benefit works

The Canada Workers Benefit is a refundable tax credit for Canadians who work but earn a low or modest income. Unlike a tax deduction, it can produce a refund even when someone owes little or no income tax, making it a valuable boost for workers feeling squeezed by everyday costs.

Eligible single Canadians may receive up to $1,665 annually, while families may qualify for as much as $2,869. Canadians approved for the disability tax credit could receive an additional supplement of up to $860, although each amount depends on income, family status, and province or territory.

The CRA pays up to half of a recipient’s benefit early through three instalments in July, October, and January. The remaining entitlement gets settled through the income tax return, which makes filing especially important for anyone expecting the July cash.

Who qualifies?

Workers generally need employment or self-employment income, Canadian residency throughout the year, and income below the limit for their household and province. Most applicants must also be at least 19 by the end of the year, although younger workers may qualify if they live with a spouse, common-law partner, or child.

There’s no separate application for the advance payments. The CRA calculates eligibility from the tax return and sends the money automatically, which makes an up-to-date return, address, and direct-deposit account the real ticket through the door.

Anyone who expected a July 10th payment but didn’t receive one should first check CRA My Account. The agency recommends waiting 10 working days before contacting it, leaving households to decide how best to use the cash once it arrives.

What to do with the payment

Essential expenses come first. Covering groceries, utilities, rent, or high-interest debt can deliver far more value than rushing into the market simply because investing sounds responsible.

Workers with those needs covered could place a small portion inside a Tax-Free Savings Account (TFSA). The account shelters investment income and growth from Canadian tax, allowing even modest contributions to begin building something beyond the next benefit date.

For investors seeking a defensive Canadian business, The North West Company (TSX:NWC) offers one place to start. The retailer supplies food and everyday essentials to remote communities across Northern Canada, Alaska, the Caribbean, and the South Pacific, where customers often have limited shopping alternatives.

A defensive dividend stock

NWC stock’s first-quarter net earnings rose 5.4% to $29.2 million, while diluted earnings reached $0.56 per share. Food same-store sales increased 2%, helping adjusted earnings improve even as total sales declined after several government-funded programs ended.

NWC stock also pays a $0.41 quarterly dividend, equal to $1.64 annually and a yield near 3.2% at recent prices. That won’t create instant wealth, but reinvesting dependable payments through a collection of Canadian dividend stocks can gradually build income without requiring enormous deposits.

That said, NWC stock faces high transportation costs, difficult weather, currency movements, and changing government support programs. Those pressures can weaken sales or margins, so even a defensive retailer shouldn’t become an investor’s entire portfolio.

Bottom line

The July 10th payment offers immediate help to Canadians who work while earning modest incomes. Using it for today’s necessities remains the priority, but anyone with a little left over could begin building a TFSA position that keeps producing long after the next CRA deposit arrives.